AUDUSD managed to clear the 0.6745 support level that kept the bears on hold the past two days, with the price falling rapidly to a new 10 ½-year low of 0.6676 early on Wednesday.
The trend signals remain negative as the price has further distanced itself below its negatively sloped simple moving averages (SMA) and the Ichimoku cloud. Yet in momentum indicators, the stochastics and the RSI suggest that the downfall is overstretched and hence the negative momentum could stall in the near term.
Immediate resistance to upside corrections could be detected around the 0.6800 level, while further up the pair may likely need to stage a sharper upturn above 0.6864 to confirm the end of the bearish phase and an outlook reversal in the medium-term (from negative to neutral). A decisive close above the July’s low of 0.6909 and more importantly above the 50-day SMA could further feed buying interest.
Should sellers drive the pair below today’s trough of 0.6676, the way would open towards the 0.6385 and 0.6437 levels taken from the highs and the lows during the 1993-1998 period.
In brief, AUDUSD is currently viewed strongly bearish both in the short- and the medium-term picture, although a potential for an upside price reversal exists.
